TMI Blog2023 (9) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... of income may significantly vary having regard to the nuanced facts of each case. When seen contextually, the additional income in instant case was conceded by the assessee in the course of survey operations at her business premises. The income surrendered is sort of lumpsum figures offered in the form of excess stock, unaccounted advance to staff, excess cash generated etc. from business operations. Such additional income confessed in survey at business premises gives a facial impression of business attributes. In the light of assertions made in statement in survey and post survey proceedings placed in the paper book, the assessee appears to have made out an arguable case that such income is concomitant of business activities and thus impressed with the character of business income as correctly disclosed in the ROI. Action of AO is not open to attack as erroneous where a view taken is in the realm of a possible view and not found to be wholly incongruous to facts or law. One can not say without any reservation that no plurality of opinion can exist on the point and such additional income cannot be treated as business income at all as adjudged by AO. This makes the action of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The press release referred is in the context of setting right the default in relation to unaccounted banned notes. The press release does not in any manner reads down the substituted provisions of S. 115BBE which are far wider in its scope and ambit. The salutary principles of charging Section 4 discussed in para 13 above would apply mutatis mutandis . The plea towards applicability of substituted provision of S. 115BBE from AY 2018-19 instead of AY 2017-18 provided in the Act thus fails. In conclusion, in the light of discussion the approach adopted by the AO being plausible, the action of the Assessing Officer cannot be labeled as erroneous although it may be prejudicial to the interest of the revenue. Thus, twin conditions of Section 263 are not simultaneously satisfied in the instant case. The jurisdiction usurped by the Pr.CIT under Section 263 thus fails on this parameter and hence the revisional order cannot be sustained in law. Consequently, the revisional order passed under Section 263 is quashed. Appeal of the assessee is allowed. - SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER For the Appellant : Shri Hari Om Jind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 for the A.Y. 2017-18-reg. Return declaring income of Rs. 55,02,880/- for the AY. 2017-18 was filed by you on 06.12.2017. Subsequently, the assessment for the year under consideration was completed u/s 143(3) of the Income Tax Act, 1961 by accepting the returned income by the Assistant Commissioner of Income Tax, Circle, Panipat vide order dated 20.12.2019. The assessment record for the period under consideration was called upon and examined. On such examination, it has been noticed that survey action u/s 133A was carried out at your business premises on 26.04.2016 in which you have offered an additional income of Rs. 40,00,000/- apart from normal business income which is largely in the nature of unexplained cash, excess stock unexplained advances found as on the date of survey which is liable to be added u/s 68/69/69/69B/69C of the Act. As per your ITR, you have shown the surrender income as business income and have paid taxes as per normal slab rates instead of tax payable at the rate of 60% u/s. 115BBE of the Income Tax Act, 1961. However, neither you have furnished any proper explanation for paying tax at low rates, nor the AO has called for any documentary evide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the Tribunal agitating supervisory jurisdiction usurped by the Pr.CIT under Section 263 of the Act. 7. The ld. counsel for the assessee broadly reiterated its detailed submissions made before the Pr.CIT and submitted in furtherance that (i) the income surrendered in the course of survey carried out under S. 133A was clearly attributable to the business operations of the assessee and having regard to the inherent character of business income, such income was rightly offered as business income in the return of income; that applicability of Section 68/69/69A/69B/69C of the Act are thus excluded having regard to the nature of income declared and consequently Section 115BBE is not attracted in the facts of the case; (ii) the press release issued by the CBDT dated 28.11.2016 contemplated that accelerated rate of 60% would be applicable to black money holders who choose to disclose such black money after Pradhan Mantri Garib Kalyan Yojna, 2016 ends. The aforesaid scheme was floated by the Government as an opportunity to the assessee to come out with clean hands and was in force upto 31.03.2017 and therefore, the provisions of Section 115BBE would naturally apply only from a pros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings, amounting to Rs. 40 lakh in aggregate comprising of (i) excess cash found on business premises Rs. 10 lakh (ii) excess stock in business premises Rs. 20 lakh and (iii) unaccounted advance to staff as per note book Rs. 10 lakh , has been wrongly accepted by AO as business income instead of assessing the same as undisclosed income chargeable under Section 68/69/69A/69C and consequently Assessing Officer has failed to apply the accelerated rate of tax @ 60% on such income contemplated under Section 115BBE instead of 30% offered by the assessee. The Pr.CIT thus alleged that the order passed by the Assessing Officer is erroneous in so far as prejudicial to the interest of the revenue. 10. It is trite that two pre-requisites must co- exist before the designated authority to enable him to exercise the revisional jurisdiction conferred on him namely; (i) the order should erroneous (ii) the error must be such that it is prejudicial to the interest of the revenue. However, an erroneous order does not necessarily mean an order with which the Pr.CIT is unable to agree or does not show assent of mind. It may be pertinent to note that the Assessing Officer while passing the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income declared in survey at business premises bears proximate nexus to the business operations and therefore, assessable under Section 28 of the Act as offered, in distinction to Section 68/69/69A/69C etc which are essentially meant to cover unidentified undisclosed income genre unconnected to business activities. As contended, the undisclosed income was detected in the course of survey and was found to be integrally connected to business activities. The applicability of S. 68/ 69/69A/69C thus stands ousted in the fact situation. As a corollary, the provisions of Section 115BBE have no applicability in the facts of the case. Secondly, the Co-ordinate Bench of Tribunal in the case of DCIT vs. Punjab Retail Pvt. Ltd. in ITA No. 677/Ind./2019 Assessment Year 2017-18 order dated 08.10.2021 has noted that 2nd amendment to Section 115BBE has come into force w.e.f. 15.12.2016 whereas the income tax survey was conducted prior thereto and therefore, the additional income surrendered before the 2nd amendment will be chargeable at the ordinary rate of 30%. 13. On appraisal of facts, we are persuaded by the first limb of the arguments. The determination of true nature and character of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount the entire conspectus of the matter, we thus find merit in this plea. The pre-requisites of S. 263 are clearly not found to be fulfilled. 14. We shall now also turn to other argument propelled on behalf of the Assessee that substituted enactment of section 115BBE came into force with assent of President of India w.e.f 15.12.2016 by Taxation Laws (second amendment) Act, 2016 [applicable w.e.f 01.04.2017] and thus income arising to assessee prior to its substitution from 15 th Dec. 2016 shall be governed by erstwhile provision of S. 115BBE. In other words, the substituted section shall not apply to income arising or accruing prior to aforesaid date of its substitution whereby the tax rates stood increased from 30% to 60%. As further contended, the additional income in the instant case had already come to surface in survey which was conducted on 26.04.2016 i.e prior to the date when the substituted provision of S. 115BBE came to effect. Consequently, such additional income can be assessed by virtue of erstwhile provisions of S. 115BBE prevailing at the time of its accrual of income only and not by substituted provision which came to life later. A reference was to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale takes effect as at that point of time the liability is incurred on that transaction. 14.3 In terms of charging and substantive provisions of Section 4 of the Act, the nature of levy under the Act is an annual charge on the income earned during the previous year relevant to the assessment year. The undisclosed income falling under the sweep of S. 68/69 etc. cannot thus escape the effect of substituted provisions of S. 115BBE coming into operation in the previous year relevant the assessment year AY 2017-18 in question. The provision of S. 4 and relevant judicial view was not brought to the notice of the co-ordinate bench cited on behalf of the Assessee. Hence, with utmost respect, the decision rendered without taking note of statutory provision of S. 4 and eludication of law by judicial precedents thereon in Punjab Retail case is sub silentio order and is thus of no moment and is without any persuasive value. 14.4 We also turn to the judgment rendered by the full bench of Hon ble Supreme Court in Vatika Township. The ratio of judgment in the case of CIT Vs. Vatika Township Private Limited, (2014) 367 ITR 466 (SC) held that the legislation which modifies accrued right ..... X X X X Extracts X X X X X X X X Extracts X X X X
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